Shareholders urged to decline Musk’s $56 billion compensation offer at Tesla

Glass Lewis, a proxy advisory firm, has taken a stand against Tesla’s proposed $56 billion pay package for CEO Elon Musk, urging shareholders to reject the deal. If approved, this would be the largest pay package for a CEO in corporate America.

The report highlighted concerns about the “excessive size” of the pay deal, its dilutive effect on ownership, and Musk’s involvement in a number of time-consuming projects, including his recent purchase of Twitter, now known as X.

Tesla’s board of directors, which has faced criticism for its close ties to Musk, proposed the pay package, which is tied to the company’s market value reaching $650 billion over the next 10 years. Currently, Tesla is valued at around $571.6 billion.

Earlier this year, a Delaware judge voided the original pay package, prompting Musk to seek to move Tesla’s state of incorporation to Texas. Glass Lewis also criticized this proposed move, citing “uncertain benefits and additional risk” for shareholders.

Despite the advisory firm’s recommendation, Tesla has urged shareholders to reaffirm their approval of the compensation. Board chair Robyn Denholm defended the pay package, stating that Musk has helped the company achieve ambitious targets for revenue and stock price.

In addition to the pay package, Glass Lewis also recommended shareholders vote against the reelection of board member Kimbal Musk, Elon’s brother, while former 21st Century Fox CEO James Murdoch’s reelection was supported.

As the battle over Musk’s pay package continues, shareholders will have to weigh the advice of Glass Lewis against the company’s arguments for rewarding its CEO’s performance.